1. Alternative Data Sources for Modeling Presented by John Wilson CAS Special Interest Seminar – October 5, 2004

2. Presentation Overview Issues to consider when appending data What about legal / privacy concerns Considerations for data applicability / use What data is available? How to find matches?

3. Legal / Privacy Concerns Are we accessing FCRA database? FCRA requires permissible purpose, or Aggregated, de-personalized research files If not FCRA data now, will it be? Use of non-FCRA data for FCRA purpose can taint the database and create new obligations

4. Data Applicability Access - if not on-line now, can it be? Coverage - full & complete, or “spotty”? Reliability Can it be pragmatically applied in workflow? Is it subject to manipulation (“gaming”)? Affordability (cost vs. benefit)

5. What property data is available? Data on the subject property geography, construction, prior losses Data on the insured consumer credit data prior losses household profile What else?

6. Types of Data Homeowners - Underwriting Report Data Consumer Credit data Loss History (CLUE) Real Property data Geographic data Inspection Results data

7. Types of Data Consumer Credit as a pre-developed score or scores as a set of pre-aggregated characteristics in “raw” form which must be aggregated Prior Coverage Information

8. Types of Data Loss History data as a set of pre-aggregated characteristics losses at property, and / or associated with consumer exclude Cats examine just property losses, or examine prior auto losses as well?

9. Types of Data Real Property Data County tax assessment information Court records Physical characteristics Sale price Other financial transactions Flood Zone Determination (FEMA / NFIP)

10. Types of Data Geographic Data Latitude / Longitude Spatial Analysis Satellite Images Distance to _________ Others?

11. Types of Data Inspection result data (internally captured) Const. Style / type / stories / replacement cost Slab / crawl / basement / daylight / finished Number of BR, BA, Kitchens, total rooms HVAC details, presence of pool, fence, etc. Underwriting hazards? Remediation?

12. Types of Data “Demographics” ages, number in household, education level home business, est. income, occupation, etc. “Psychographics” magazines, TV shows, catalog purchases survey results extended to all via geography Coverage / Individual / Reliable / OK?

13. Types of Data Internal appends past premium payment history time with carrier, other coverages experience on companion policy deductibles, protection devices, etc. Consider potential before ruling it out

14. What auto data is available? Data on the vehicle(s) Data on the insured consumer credit data prior losses household profile driving practices / places What else ?

15. Types of Data Automobile - Underwriting Report Data Consumer credit Loss History - both lines! MVR? - company captured violations must be normalized application may need to be state-specific Prior Coverage Information

16. Types of Data Automobile - Underwriting Report Data Vehicle Data Home Ownership Verification Household Composition Demo / Psychographics Internal appends

17. How to find matches Use consumer ID data to match Full name Address SSN DOB DL # ID must be removed prior to analysis